One of the biggest challenges businesses face in their ongoing digital transformation efforts is modernizing core legacy systems. Quite often these systems are highly customized. They’re also running older versions of software, which can be inflexible and costly. When cloud and Software-as-a-Service (SaaS) computing first emerged a decade ago, businesses found they could efficiently deploy solutions in a host of collateral areas, such as marketing automation or team collaboration. However, the services  offered little relief when it came to replacing core systems.

Over the ensuing decade, we’ve witnessed an explosion of cloud-based applications delivering business capabilities, processes and products across the full spectrum of enterprise operations. The scope and power of these services grant businesses an opportunity (some would call it an imperative) to redesign businesses processes as a collection of connected services across organizational boundaries and to take a fresh approach to refactoring legacy platforms.

Welcome to the age of Anything-as-a-Service (XaaS).

XaaS as an operating strategy

Given the pervasive impact of cloud and SaaS technologies in transforming business models and the accelerated pace of technological innovation, a case can be made for embracing Anything-as-a-Service as a strategic blueprint for transforming business capabilities, processes and products. If businesses are to implement this blueprint their core legacy systems must become more flexible, scalable and capable of supporting the innovations driving the XaaS strategy. In short, modern IT architectures and platforms must be services-based.

For organizations evolving to a services-based architecture with an XaaS mindset it’s vital to understand what’s driving the XaaS movement and the lessons learned from its early adaptors.

  • The customer – Customers expect to be able to consume services in a highly efficient, low-friction manner. This, of course, implies the availability of rich mobile and social tools, intuitive customer experiences grounded in data and, increasingly, on AI and machine learning capabilities, which are services that can be sourced from cloud vendors.
  • Redesign business processes as services – Determining those commodity business processes, such as billings, receivables and project management, that can be handled through business process outsourcing or cloud services. For strategic processes, such as product design, planning and pricing, the goal is to develop services that create greater efficiency and agility, are available across the organization and can be leveraged to competitive advantage.
  • API access to legacy assets – The most common and the more cautious approach to revitalizing a legacy asset is to layer an Application Programming Interface (API) over it. This makes it possible for companies to make assets available to a wider audience including employees, customers, business partners and vendors. An API also extends the value of these assets by opening more opportunities for reuse and monetization.
  • Start along the edges – Core legacy platforms are complex systems that integrate a collection of services. Wholesale replacement is usually not an option. Instead, begin by peeling away capabilities from the edges and replace them with tightly coupled applications with cloud-based services. For example, replace an embedded e-Commerce application in an Association Management System with a cloud-based CRM approach.
  • New skills and new culture – The transition from traditional systems and processes to the new reality of APIs, cloud services and big data will require different skillsets in IT. Fortunately, there is a growing body of talent in these areas. In a broader sense the shift to an XaaS mindset is cultural, involving new ways of organizing and connecting services to people, processes and partners across and beyond the organization.

In an ‘ Insights ’ piece, Deloitte projects that “…within the next 18-24 months [XaaS] will likely begin upending business and operational models, and redefining the fundamental goals of core modernization.”

Similar to how Amazon’s Web Services business has radically changed the equation for provisioning and operating complex infrastructures, the Anything-as-a-Service movement has the potential of ushering in new operating environments, modern digital ecosystems and to deliver models and fresh approaches for modernizing core legacy platforms.